Paspaley v Chief Commissioner of State Revenue

Relevant legislation 5Part 3 of the Land Tax Management Act 1956 (the LTM Act) provides that land tax is payable by the owner of all land in New South Wales other than land which is exempt from taxation under the LTM Act. The tax year is each period of 12 months commencing on the first day of January and land tax is charged on land owned as at midnight on 31 December immediately preceding the tax year (sections 7-9). 6The "principal place of residence" of a person is defined in s 3(1) of the LTM Act to mean "the one place of residence that is, among the one or more places of residence of the person within and outside Australia, the principal place of residence of the person". In accordance with s 10(1)(r) of the LTM Act, land is "exempt from taxation under the principal place of residence exemption, as provided for by Schedule 1A." (referred to as Sch 1A or the Schedule) 7Sch 1A relevantly provides as follows: "Schedule 1A Principal place of residence exemption Part 1 Preliminary 1 Definitions (1) In this Schedule: principal place of residence exemption-see clause 2. residential land-see clause 3. ... taxing date-means midnight on the thirty-first day of December. Part 2 Principal place of residence exemption 2 Principal place of residence exemption (1) Land used and occupied by the owner as the principal place of residence of the owner of the land, and for no other purpose, is exempt from taxation under this Act, in respect of the year commencing 1 January 2005 or any succeeding year, if the land is: (a) a parcel of residential land, or (b) ... (2) Land is not used and occupied as the principal place of residence of a person unless: (a) the land, and no other land, has been continuously used and occupied by the person for residential purposes and for no other purposes since 1 July in the year preceding the tax year in which land tax is levied, or (b) in any other case, the Chief Commissioner is satisfied that the land is used and occupied by the person as the person's principal place of residence. (3)... (4) The exemption conferred by this clause is referred to as the principal place of residence exemption. (5)... 3 Residential land-meaning (1) In this Schedule, residential land means land that is used and occupied for residential purposes and for no other purpose, that use and occupation being use and occupation of a building or buildings designed, constructed or adapted for residential purposes, other than a building or buildings: (a)... or (b) ... or (c) from any part of which income is derived. (2)... Part 3 - Concessions in application of principal place of residence exemption ... 8 Concession for absences from former residence (1) If the Chief Commissioner is satisfied that: (a) a person is the owner of land ("the former residence) that has been used and occupied by the person as his or her principal place of residence for a continuous period of at least 6 months, and (b) the person uses and occupies other land (whether or not in New South Wales), that is not owned by the person, as his or her principal place of residence, the person is taken, for the purpose of the principal place of residence exemption, to continue to use and occupy the former residence as his or her principal place of residence. (2) The maximum period for which a person may be taken, under this clause, to continue to use and occupy a former residence as a principal place of residence is 6 years starting at the end of the last period (of at least 6 months) during which the former residence was used and occupied by the person as a principal place of residence (not including any period for which the person may be taken, under clause 7 or this clause, to have used and occupied the former residence as a principal place of residence). (3) If the principal place of residence exemption applies to the former residence of a person by operation of this clause, the exemption ceases to have effect if the person is the owner of the former residence at the end of the 6-year period referred to in subclause (2) and fails: (a) to resume actual use and occupation of the residence as a principal place of residence by the end of that period, and (b) to continue that use and occupation for at least 6 months. (3A)... (4)... (5) ... (6) This clause applies in respect of the assessment of a person's ownership of land in a tax year only if the Chief Commissioner is satisfied that no income has been derived from the use or occupation of the former residence in the preceding tax year, except as permitted by subclause (7). (8) This clause is subject to clause 12 (which limits members of a family to one principal place of residence exemption). Part 4 - Restrictions 12 Only one principal place of residence for all members of same family (1) For the purposes of the principal place of residence exemption, only one place of residence may be treated as the principal place of residence of all members of the same family. (2) If members of a family own (whether jointly or separately) more than one residence used and occupied by any of them as a principal place of residence, the Chief Commissioner is to treat the one place of residence elected as the principal place of residence of the family as the principal place of residence of all members of the family in respect of a tax year. (3) Such an election is to be made, by or on behalf of the members of the family, in writing and must be lodged with the Chief Commissioner within the period for the lodging of objections under section 89 of the Taxation Administration Act 1996. (5) If an election is not made, the Chief Commissioner is to treat the residence that has the highest land value for land tax purposes as the principal place of residence of all members of the family. (6) For the purposes of this clause, a "family" consists of the following: (a) a person and his or her spouse (if any), (b)... (7) A person is the "spouse" of another person if: (a) they are legally married, or...

The Applicant's case 8The Applicant submitted at [13] in written submissions filed 14 July 2014 (AS1) that: (a)"the statutory PPR exemption applies to the Sydney Property; (b)in the alternative, the concession for absences from former residence applies such that the PPR exemption applies to the Sydney Property; (c)further and in the alternative, if the applicant's family is found to own more than one residence used and occupied by any of them as a PPR; (i)the applicant made a valid election that the Sydney Property be the PPR for her family; or (ii)alternatively, the Sydney Property should be treated as the PPR for the applicant's family as it has the highest land value for land tax purposes." 9The Applicant relied on the following documents tendered during the hearing: (1)statement of the Applicant affirmed 25 March 2014 (MPP1) and its exhibit MP1 (filed 26 March 2014) of 839 pages; (2)statement of the Applicant affirmed 10 July 2014 (MPP2) and its exhibit MP2 (filed 15 July 2014); (3)statement of Garry Milan Grbavac affirmed 25 March 2014 and its exhibit GG1 (filed 26 March 2014) (GMG1); (4)expert report of Vincent Alfonso dated 28 March 2014 (filed 28 March 2014) (Alfonso Report); (5)expert report of James Allen dated 28 March 2014 (filed 28 March 2014) (Allen Report); (6)documents filed by the respondent on 10 September 2013 under s. 58 of the Administrative Decisions Review Act 1997 (NSW) (s. 58 documents) comprising 4 tabbed volumes of 2146 pages; (7)documents produced under summons from the Tribunal to Sydney Water Corporation (Sydney Water documents) and AGL Energy Limited (AGL documents) ; and. (8)15 page document prepared by the Applicant when she was preparing MPP1.The Applicant asserted that the document (the Location Diary) sets out in summary form details of her location from January 2006 to December 2012, on at times a daily basis, together with brief comments as to her reason for being at certain locations on certain dates. 10The Applicant also relied on AS1 and supplementary submissions filed on 9 Sep 14 (AS2) as well as oral submissions by Ms Ensor during the hearing. Except where the context otherwise requires all references to submissions by Ms Ensor or the Applicant containing a paragraph number are from AS1. Similarly, except where the context otherwise requires all references to evidence or statements by the Applicant which contain a paragraph number are references to MPP1.

The Respondent's case 11The Respondent submitted at [2] in written submissions filed on 19 May 2014 (RS1), that the principal place of residence of the Applicant throughout the Relevant Period was in Northern Australia. The Objection Determination, located at pages 2137 - 2139 of the s. 58 documents, provides that the Chief Commissioner considered that the Applicant's property at Marina Boulevard Cullen Bay NT 0820 (Marina Bay Property) referred to in the Respondent's submissions as the First Apartment, and then the Applicant's property at Cullen Bay Crescent Darwin NT 0800 (CBC Property) were the Applicant's principal places of residence from July 2000 until she moved to Broome in 2006. For the 2008 to 2012 tax years the Chief Commissioner considered that the Applicant's principal place of residence was at Lucas St Broome until November 2010 and then at Hunter St, Broome. 12The Respondent relied on: (1)The s. 58 documents, the AGL documents and the Sydney Water documents referred to above; (2)documents produced under summons from the Tribunal to Energy Australia (the Energy Australia documents) and Power Water (the Power Water documents); (3)a property profile report dated 25 Aug 14 in relation to the CBC Property; and (4)RS1, written submissions in reply filed on 25 August 2014 (RS2) and oral submissions by Mr Bennett. 13Except where the context otherwise requires all references to submissions by Mr Bennett or the Chief Commissioner / Respondent containing a paragraph number are from RS1. 14The parties jointly provided a brief Agreed Statement of Applicant's Location (the Agreed Statement) during the hearing.

Consideration 15It is not disputed that: (1)The Applicant was the owner of the Sydney Property for the whole of the Relevant Period until 30 November 2014. (2)Unless the principal place of residence exemption applies in accordance with Sch 1A of the LTM Act, the Applicant is liable for land tax for the Relevant Period. 16The Applicant has the onus of proving her case: s 100(3) of the Taxation Administration Act 1996 (the TA Act). This was conceded by the Applicant. 17The standard of proof in reviews by the Tribunal is the "balance of probabilities". Cornish Investments Pty Limited v Chief Commissioner of State Revenue (RD) [2013] NSWADTAP 25 at [31] and B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187, (2008) 74 NSWLR 481 per Allsop P at [104] (Giles and Basten JJA agreeing). 18The Sydney Property was assessed for premium property tax as the Applicant's principal place of residence in accordance with the now repealed Premium Property Tax Act 1998 for the 2002 to 2004 tax years. A principal place of residence exemption was granted for each of the 2005 and 2006 tax years. 19In August 2011 the Chief Commissioner commenced an investigation into the principal place of residence exemption claimed by the Applicant for the Sydney Property. The Chief Commissioner informed the Applicant of the investigation by Notice dated 24 October 2014. At the conclusion of the investigation the Chief Commissioner determined that the exemption did not apply and issued the Assessment for the Relevant Period. By the time the investigation was concluded the 5 year period for reassessment (s. 9 of the TA Act) had lapsed and there was no reassessment for tax years prior to 2008. 20In order to place the submissions of the parties in context it is helpful to consider the evidence concerning the locations at which the Applicant resided in the period up to and including the Relevant Period and the reasons given by the Applicant for changing her residence throughout that extended period. 21In her early years the Applicant lived studied and worked in New South Wales, the Northern Territory and Western Australia. Her home in Darwin was compulsorily acquired by the Northern Territory government in 1984. She purchased a home in Melbourne in 1985 and worked there for some years. In 1987 she commenced working for what she called the Paspaley Group. This enterprise was started by her late father as a pearling business in the 1930s and is now involved in diverse activities including pearling, jewellery production and retailing. 22From 1987 to 2005 the Applicant was Executive Director of the Paspaley Group and made several business trips a year to Broome as well as working in Darwin for some months. 23In 1988 the Applicant lived in Broome for between four and six months establishing a Paspaley retail outlet. She then returned to Melbourne where she lived and worked but also made some trips to Broome over the next two years. 24In 1990 the Applicant and her husband Mr Grbavac temporarily moved to Sydney to oversee construction of a Paspaley Group retail outlet which opened in September 1990. The Applicant and her husband decided to move to Sydney on a more permanent basis and purchased the Sydney Property. 25In about April 1997 the Applicant's mother, who lived in Darwin became gravely ill and was hospitalised. The Applicant flew to Darwin and remained there for some weeks. The Applicant decided to spend an increased amount of time in Darwin to be closer to her mother and to oversight the care her mother was receiving. 26In about June 1997 the Applicant purchased the Marina Property which was within walking distance of her mother's home. She furnished the Marina Property and lived there when she was in Darwin until her mother passed away in September 2003. The Applicant's evidence is that she did not remove any items of furniture, art, equipment, appliances, vehicles or clothing other than some casual summer clothing from the Sydney Property to the Marina Property. Her evidence at [70] is that she "returned to Sydney frequently" . 27While in Darwin the Applicant worked as Executive Director of retail for the Paspaley Group from its head office in Darwin. 28The Applicant said at [76] "The passing of my mother in September 2003 had a profound impact on me. I did not feel bound to Darwin and attempted to reduce my workload as Executive Director at Paspaley. " I refer to the comment "I did not feel bound to Darwin" below as it is contrary to a subsequent public statement she made. 29In December 2005 the Applicant retired as Executive Director of the Paspaley Group but remained a director on the board of the company. The workload with the Paspaley Group decreased "dramatically". She then focused on the development of two hotels in the Kimberley region of Western Australia for the benefit of her own family. However she continued to be involved for the next several years with events for the Paspaley Group in Darwin, Broome, the Kimberley coast, New Zealand, Switzerland and other places. 30The Applicant asserted she "was an itinerant, travelling from place to place specifically to perform my work and the duties for which I was responsible". 31The Applicant was involved in the acquisition development and operation of Pinctada Kimberley Grande from 2005 to at least March 2014. She was heavily involved in the design, feasibility, construction, completion, opening and ongoing operation of Pinctada Cable Beach Resort & Spa in Broome from 2005 until at least March 2014. The Applicant was also involved in other substantial business activities throughout northern Australia and other parts of Western Australia before, during and after the Relevant Period. 32The Applicant gave detailed evidence of what she perceived as the need for her substantial personal involvement in the financing development and operation of Pinctada Kimberley Grande, Pinctada Cable Beach Resort & Spa and other investments by her companies. She also gave evidence of her commercial decision to establish an accounting office in Darwin for both Pinctada Kimberley Grande and Pinctada Cable Beach Resort & Spa. She said that on retiring from the Paspaley Group in December 2005 she became fully involved in those 2 projects and began working full-time on them in early 2006. 33A large block of land at Lucas Street Broome was leased by Civic North Pty Ltd in February 2007. The site included a three-bedroom dwelling and office and a 1-bedroom flat of approximately 60 m² with kitchenette/lounge, toilet, shower room and laundry/wardrobe room. The Applicant, who as sole shareholder of the ultimate holding company of Civic North Pty Ltd and one of the directors of Civic North Pty Ltd, and her husband determined that they would use the flat for their visits to Broome. The site was also used for company vehicles and heavy equipment as well as storing project materials for the Pinctada Cable Beach Resort & Spa development. Some of the apartment facilities were used by staff at various times. The lease ended on about 31 October 2010. 34Another property in Hunter Street, Broome, was owned by MP Properties Pty Ltd from 2002 to 2012. At [11] the Applicant described this company as part of the MP Group. The Applicant is managing director of all companies in the MP Group. All these companies are owned by the Applicant's family trusts. 35The Applicant and her husband decided to use the staff quarters at Hunter Street as their accommodation from October 2010 when they visited Broome on business. The Applicant described the accommodation as rudimentary and substandard and stated that staff employed by her companies had access to the shed and the house. She said that she and her husband kept no personal possessions at the accommodation. 36From 1 January 2007 to 31 December 2011 the Applicant resided at Broome for an average of 156 nights each year and during the same period she averaged 46 nights at the Sydney Property and 45 nights at the CBC Property. 37In late 2011, at about the time the Applicant was notified of the investigation by the Chief Commissioner, the Applicant determined to move some valuable artwork from the CBC Property to the Sydney Property. The Applicant said the reason for the artwork relocation was her concern about dampness at the CBC Property potentially damaging the artwork. The artwork was owned by her superannuation fund and had to be kept in storage rather than displayed. 38In calendar 2012 the Applicant spent substantially more time at the Sydney Property than she had done for at least the previous 6 years. She said she was able to reduce her business commitments in northern Australia in that year. 39It is noted that although the objection lodged with the Chief Commissioner in December 2012 by Deloitte lawyers Pty Ltd of Melbourne stated that the residential address of the Applicant was the Sydney Property, her preferred address, presumably for contact purposes, was the GPO Box 338 Darwin NT 0801 (the Darwin post box). 40Ms Ensor submitted that the Applicant's primary argument is that the principal place of residence exemption in clause 2(1)(a) of Sch 1A applies to the Sydney Property because,: (a)"the relevant years succeed 1 January 2005; (b)the applicant was the 'owner' of the Sydney Property; (c)the Sydney Property was a parcel of residential land; (d)the Sydney Property was the one place of residence that was, among the applicant's places of residence, her PPR; and (e)the Sydney Property was used and occupied by the applicant as her PPR and for no other purpose." 41Clause 2(2) of the Schedule relevantly provides that land is not used and occupied as the principal place of residence of a person, that is clause 2(1) will not apply, unless the person proves (on the balance of probability) that: (1)The Sydney Property was continuously used and occupied by the Applicant for residential purposes and for no other purposes since 1 July in the year preceding each tax year in which land tax was levied and no other land was continuously used and occupied by the Applicant for residential purposes and for no other purposes since 1 July in the year preceding each tax year in which land tax was levied (clause 2(2)(a)); or (2)The Chief Commissioner should have been satisfied that the Sydney Property was used and occupied by the Applicant as the Applicant's principal place of residence for the Relevant Period (clause 2(2)(b)).

Meaning of principal place of residence 42In Black v Chief Commissioner of State Revenue [2011] NSWADT 66 Hirschhorn J M said at [81]: "The definition of "principal place of residence" in section 3 LTMA acknowledges that a person may reside at more than one place during the relevant land tax years. It provides that only one of those places however can constitute the "principal" place of residence: Aronstan v Chief Commissioner of State Revenue [2008] NSWADT 8; Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184 at [19], Chief Commissioner of State Revenue v Mesiti [2003] NSWADTAP 56 at [37]; Carey v Chief Commissioner of State Revenue [2010] NSWADT 78." 43At [82] Hirschhorn JM referred to Chief Commissioner of State Revenue (RD) v McIlroy [2009] NSWADTAP 21 in which the Appeal Panel at [44] set out a useful summary of factors that might be considered in relation to this matter as originally referred to in CCSR v Ferrington [2004] NSWADTAP 41, albeit in the context of the First Home Owner Grant Act 2000: The Appeal Panel said at [45]: "this Appeal Panel considers that the factors in Ferrington, while not formulated for applying the specific legislation relevant here, are nevertheless of assistance in construing that legislation. They are not necessarily determinative, and do not displace the developed case law on the meaning of the phrase where it is used in the Land Tax Management Act." 44The Applicant submitted at [32] - [33]: "Although a person's place of residence may be usually understood as "the place where he eats, drinks and sleeps" the definition of PPR in s 3(1) of the Act recognises that a person may reside at more than one place during a land tax year. A person can, however, have only one PPR. Whether a property is a taxpayer's PPR is a question of fact and degree to be determined on an objective view of the evidence before the Tribunal, having regard to the extent and quality of the residences' use and occupation." 45The Chief Commissioner relied on the decision of Verick JM in Yen-Cheng Chuang & Anor v Chief Commissioner of State Revenue [2009] NSWADT 160 who said at [19]: "The Act does not provide any technical or legal meaning for the expression "principal place of residence" and accordingly, the expression has its ordinary meaning. A person's place of residence is usually understood as "the place where he eats, drinks and sleeps" (per Ridley J in Stoke-On-Trent Borough Council v Cheshire County Council [1915] 3 KB 699 at 706). The use of the term "principal" in the expression suggests that a person may use and occupy more than one residence but that the exemption is only available for the principal place of residence of the person." 46In Black Hirschhorn JM referred to a number of principles to be derived from the decided cases as to objective factors that might be taken into account in addition to the Ferrington factors. 47Counsel for both the Applicant and the Respondent made written and oral submissions in relation to each of the Ferrington and Black factors . I deal with the factors, the submissions and relevant evidence below. I have summarised the factors and removed case references for ease of reading. It is apparent that certain factors overlap on occasion. The first Ferrington factor - the words "principal place of residence" should be given their ordinary meaning in the context in which they appear ... 48This has been outlined briefly above and is referred to further below. The second Ferrington factor - the consideration of whether a person has been residing or occupying premises as their principal place of residence is to be assessed objectively, in the light of the circumstances relating to the actual occupation of the dwelling .. 49The Applicant addressed this issue at [38] and [39] as follows: 38. In Commissioner of Land Tax v Christie [1973] 2 NSWLR 526 Bowen JA (with whom Jacobs P agreed) considered the expression 'used and occupied' in the context of the former s 9(3)(e) of the Act, stating, at 533-534 (footnotes and citations omitted): "Use" has regard to the purpose to which the land is put. Under s 9(3)(e) it must be shown to have been devoted to the purpose of constituting the site of the dwelling house. Provided there is a unity in the land in question in a physical sense and a unity in what is done in devoting it to the purpose of providing or constituting the site, and provided there is a sufficiently proximate and not too remote connection between the dwelling house and its requirements or the requirements of its users or occupants on the one hand and the whole of the land in question on the other hand, then this element will be sufficiently established to demonstrate "use" as the site of the dwelling house. "Occupation" is not synonymous with legal possession. It includes possession, but it also includes something more... It involves an element of control, of preventing or being in a position to prevent the intrusion of strangers... It is for this reason that physical presence on the land and fencing are evidence of occupation. But continuous physical presence or physical presence on every part of the land does not have to be shown in order to establish occupation. If it were necessary to prove physical presence on every part of a residential block to secure the deduction a substantial proportion of residential blocks could well be denied it. It is not uncommon in our community for there to be portions of such blocks which are rarely or never visited. Indeed, as these present cases illustrate, there may well be portions of such blocks which are precipitous, or are under water or are covered with dense bushland and which are, therefore, in a practical sense difficult if not impossible to traverse physically. This does not mean they are not "occupied" in a legal sense. To hold otherwise, would be to subvert the obvious intent of s 9(3)(e). Nor, although the presence of fencing may be some evidence of occupation, does the absence of fencing establish that there is not occupation..." 39. It has since been held by the NSW Court of Appeal, however, in the context of the PPR exemption, that "used and occupied" should be considered as a composite phrase rather than as separate terms. In De Marco v CCSR [2013] NSWCA 86 Basten JA stated at [71] (cited with approval in Ghali v CCSR [2013] NSWCA 340 at [29]-[30]): The terms 'use' and 'occupation' may not be synonymous, though in a practical sense they will usually be identified by the same characteristics which, where use and occupation are associated with ownership, will commonly involve the exercise, or at least the intention to exercise, the legal right of control which flows from ownership: Council of the City of Newcastle v Royal Newcastle Hospital (1959) 100 CLR 1 at 4 (PC, Lord Denning). That fact suggests that the phrase 'use and occupation' should be treated as an hendiadys, thus relieving of the need to consider each concept separately." 50Mr Bennett also referred to the above statement by Bowen JA. The extent of the relevance of Christie in the context of this matter is dealt with below. 51Ms Ensor submitted at [74] and [75]: "The Sydney Property was used and occupied by the applicant solely for residential purposes and for no other purpose. The Sydney Property was never tenanted and was always available to the applicant for her immediate use. The applicant occupied the Sydney Property as her PPR as at all material times she was entitled to legal possession of, and full control and exclusion of others from, the Sydney Property. As identified in Christie, continuous physical presence on the Sydney Property does not have to be shown in order to establish the applicant's occupation. That the applicant organised security and monitoring services for the Sydney Property for periods including 1 July to 30 September 2005, 1 October to 31 December 2006, 1 October to 31 December 2007, 1 July to 31 December 2008"1 July 2009 to 31 December 2009, September 2011, December 2011 and July 2012 is indicative of her full control of the Sydney Property and her ability to occupy it to the exclusion of others." 52Ms Ensor submitted orally that in relation to the applicability of clause 2(2)(a) the Applicant does not need to sleep at the Sydney Property every night of the relevant year. I acknowledge the submission and deal with it below. 53The Respondent referred to clause 2(2) and s. 3 as follows: "41. Clause 2(1) of the Schedule provides the exemption. It requires satisfaction before the exemption is available. Clause 2(2) of the Schedule, which includes the provision of discretion to the Chief Commissioner, is a further limit on when the exemption is available. Importantly, satisfaction of clause 2(2) is required to satisfy clause 2(1), however satisfaction of clause 2(2), of itself, does not ensure satisfaction of clause 2(1). Those two clauses, so far as is relevant, provide:

1. Land used and occupied by the owner as the principal place of residence of the owner of the land, and for no other purpose, is exempt ....
2. Land is not used and occupied as the principal place of residence of a person unless: (a) the land, and no other land, has been continuously used and occupied by the person for residential purposes and for no other purpose since 1 July in the year preceding the tax year in which land tax is levied, or in any other case, the Chief Commissioner is satisfied that the land is used and occupied by the person as the person's principal place of residence. (emphasis added) "Section 3 of the Act defines the term "principal place of residence" as: Principal place of residence of a person means the one place of residence that is, among one or more places of residence of the person within and outside Australia, the principal place of residence of the person. (emphasis added) " 42. The Chief Commissioner's case in relation to clause 2 of the Schedule, in short, is that: a) the applicant did not use and occupy the Property as her principal place of residence thereby failing clauses 2(1) and 2(2)(a) of the Schedule; b) the Darwin Home, or alternatively other Northern Australian properties located in Broome, were used as her principal place of residence, thereby failing clauses 2(1) and 2(2)(a) of the Schedule; c) that the applicant did not continuously use and occupy the Property form 1 July of any year preceding the 2008 to 2012 tax years, thereby failing clause 2(2)(a) of the Schedule; and (d) d) the facts of the case render clause 2(2)(b) of the Schedule inapplicable to the applicant. 43. It is convenient to consider the "use" and "occupation" of the Property and the Darwin Home before considering the "discretion" in clause 2(2)(b) of the Schedule. 44. Given the scheme of the Act, the time at which satisfaction of use and occupation is required is at the taxing date: Chief Commissioner of State Revenue v Aldrige [2003] NSWADTAP 50 at [12]. At this time throughout the Relevant Period the Property was neither the applicant's principal place of residence, whereas the First Apartment, the Darwin Home and/or the Broome properties were." "46. The use to which the Property was put at the taxing dates was to remain vacant other than limited use in the Australian summer season for up to one month. In contrast, the applicant had ample use and occupation of the First Apartment and then the Darwin Home because her business interest, her husband's business interests and her mother's health brought her back to her true home, Darwin"

Objective assessment of 'use and occupation' of premises as a principal place of residence. 54Clause 2(2) of Sch 1A requires that the words 'use' and 'occupation' are to be construed in relation to the purpose of the 'use and occupation'. Firstly in order to obtain the benefit of the exemption, that purpose must be to use and occupy the premises as a residence and secondly as a principal place of residence. 55It is informative to consider the factual context in which Bowen JA delivered his judgment. Christie was one of three appeals by the Commissioner of Land Tax heard concurrently in the Court of Appeal in 1973. Future references in this decision to Christie refer globally to the three matters. Each of the appeals involved a situation in which a large area of land was purchased by an individual who erected a single dwelling house on the land and who resided with his respective family in that house as his principal place of residence from the time the house was erected until at least the date of the hearing. The periods of unbroken residence ranged from 12 to 27 years. 56Bowen JA, with whom Jacobs P agreed, said at page 532 "In each case, it was common ground that there was a house used as a private dwelling house... by the taxpayer who owned the land on which the house was situated. In each case the taxpayer claimed a deduction under s. 9 (3) (e) of the Land Tax Management Act 1956. ... Section 9 (3) (e) provides for the deduction "Where, as at midnight on (a certain date) land owned by a person is used and occupied by that person solely as the site of a single dwelling-house..." 57In each case the Commissioner's arguments included the argument that the trial judge had erred in holding that the whole of the subject land was used and occupied solely as the site of a single dwelling house and that he ought to have found that a substantial part of the subject land was not being used and occupied solely or at all as the site of a single dwelling house. 58Bowen JA said at pages 532 and 533: "The broad purpose of s. 9 (3) (e) is clear enough. It is designed to give a deduction in respect of the taxpayer's home. To become entitled to the deduction a taxpayer must show that he owns the land. Nothing turns on ownership here. He must then show that the land is used and occupied by him solely as the site of a dwelling house. The word "solely" is introduced to exclude the deduction where there is also some different or inconsistent use or occupation, such as a use or occupation for commercial purposes. Nothing turns on the word "solely" in any of the present cases; no inconsistent use or occupation is suggested. The section does not speak of land occupied by the dwelling house. It speaks of land used and occupied by the taxpayer as the site of a dwelling house. Counsel for the Commissioner quite properly conceded that the deduction is not limited to the area of land actually taken up by the dwelling house, but extends beyond that to land used and occupied by the taxpayer in connection with the dwelling house.." 59The decision of the Court of Appeal in each case was that the relevant deduction was not limited to the area of land actually taken up by the dwelling house but extended beyond that to land used and occupied by the taxpayer in connection with the dwelling house. 60The issue before the Tribunal is whether the use and occupation of the Sydney Property, comprising both a dwelling house and a relatively small surrounding area (small when compared with the areas of land the subject of Christie), was a continuous use and occupation as her principal place of residence in each tax year in the Relevant Period. The phrase 'use and occupation' in Christie referred to the use and occupation of the large portions of the subject land in each case which were not "the actual area of the house and the land around it reasonably necessary to permit the dwelling house to be used for dwelling " per Huntley JA at page 529. Accordingly the context for the phrase "use and occupation" in Christie materially differs from the context of that phrase in these proceedings.. 61I agree with the submission of the Applicant in AS1 that whether the Sydney Property is the Applicant's principal place of residence "is a question of fact and degree to be determined on an objective view of the evidence before the Tribunal, having regard to the extent and quality of the residences' use and occupation." However that use and occupation must be for the purpose of the Applicant's principal place of residence, the use and occupation must be continuous from 1 July in the year preceding the tax year in which land tax is levied and the only purpose of the use and occupation is residential.

The third Ferrington factor - the intention of the person concerned, gauged objectively, is relevant but not determinative of the issue. 62Ms Ensor submitted at [53] - [57]: "It is now and was at all material times the applicant's intention, gauged objectively, that the Sydney Property was her PPR. The applicant has not claimed a PPR exemption for any other property either in Australia or overseas at any time since acquiring and moving into the Sydney Property. Further, the applicant's intention as to the Sydney Property is demonstrated in a way that can be objectively gauged by the statements she made on her incoming and outgoing passenger cards. The applicant's incoming passenger cards provide the following information: Passenger card Intended address Your contact Section 58 doc. date in Australia details in Australia page no. 27/11/2006 CBC No address listed 1781 14/07/2007 Sydney Property No address listed 1783 05/08/2007 CBC No address listed 1785 13/10/2007 Sydney Property No address listed 1787 30/12/2007 Sydney Property No address listed 1789 03/02/2008 Sydney Property No address listed 1791 05/04/2008 Sydney Property No address listed 1793 12/04/2008 Sydney Property No address listed 1795 17/05/2008 Sydney Property No address listed 1797 24/06/2008 Sydney Property Sydney Property 1799 15/07/2008 Sydney Property Sydney Property 1801 23/10/2008 Sydney Property No address listed 1803 18/12/2008 CBC No address listed 1805 13/02/2009 Sydney Property No address listed 1807 15/07/2009 Sydney Property No address listed 1809 29/08/2009 CBC No address listed 1811 22/09/2009 Sydney Property No address listed 1813 29/09/2009 Lucas Street, Broome No address listed 1815 27/10/2009 Sydney Property No address listed 1817 07/12/2009 Sydney Property No address listed 1819 02/04/2010 Sydney Property No address listed 1821 29/04/2010 Sydney Property No address listed 1823 15/05/2010 Lucas Street, Broome No address listed 1825 30/08/2010 Sydney Property No address listed 1827 25/01/2011 Sydney Property No address listed 1829

When the applicant filled in her intended address on these incoming passenger cards, she understood the question to be asking about her immediate accommodation rather than her PPR. In any event, on 19 of the 25 incoming passenger cards, being 76%, the applicant listed the Sydney Property as her intended address and on the only two cards where she provided a contact address, the address of the Sydney Property was provided." 63The evidence discloses 24 incoming passenger cards covering the period from 14 July 2007 to 25 January 2011. Of these 19 refer to the Sydney Property as the intended address of the Applicant in Australia. The Applicant stated at [221]: "...The incoming passenger card asks for "intended address in Australia". I did not read this question as a question about my principle (sic) place of residence, rather a question of where I was going to be either immediately or shortly after disembarking the vessel and for no specified period of time." 64The Applicant's expressed intention did not accord with her action. Stating that her intended address in Australia in incoming passenger cards was the Sydney Property does not assist the Applicant. The Location Diary shows that on only 3 of the 19 occasions on which the Applicant listed the Sydney Property as the place where she was going to be immediately or shortly after disembarking did she actually stay at the Sydney Property for at least one night. 65The Respondent referred to public statements by the Applicant as to the place she regarded as her real home. In giving the 19th Eric Johnston Lecture in 2005 the Applicant said: "I'm a Territorian, and more precisely a Darwinite. Let me give you a brief summary of my connection with this town. I attended both primary school and high school in Darwin from 1956 to 1968. After studying at the University of NSW and then living in mining towns in Western Australia for several years, I returned to Darwin in 1976 and successfully applied for the position of Executive Director of the Keep Australia Beautiful Council, a rather busy job if you remember post-Tracey Darwin. ... After a brief absence from Darwin in 1978, I returned once again, this time to work as an announcer and presenter on ABC Radio and television. ... I also joined my family company, Paspaley Pearling Company, in 1988 to open the doors of the first Paspaley Pearls Boutique in Broome, Western Australia. Moving between Broome, Melbourne and finally Sydney, I carried on the two professions of general manager of retail and actress until I left my acting profession in 1996 to focus entirely on the development of the retail division. This led to my return to Darin (sic) in 1997 and I have made this my base ever since, despite a hectic domestic and international travel schedule. (emphasis added)" The applicant concluded that lecture by saying, of Darwin's spirit, 'It is unique. It is what brings me home.' 66The Applicant's written response to the Respondent's submissions is at [89]: "The RS emphasise the empirical value of articles written about, and speeches given by, the applicant in determining the applicant's PPR ([6]-[9]). Such emphasis is misconceived. Articles written by journalists are necessarily not written by the applicant and are not demonstrative of either the applicant's subjective intention as to her PPR or any objective reality. The speeches given by the applicant which the respondent references were given in a business context by a non-lawyer where the underlying purpose of the speeches did not relate to taxation. In these circumstances, any references made to having a connection with one place or another are not determinative, nor even informative, when considering whether the applicant has satisfied the statutory definition for the grant of the PPR exemption." 67In response the Respondent said at [16] in RS2: "The eighth issue concerns paragraph [89] of the applicant's submissions, at which a challenge is made to the respondent's reliance on the applicant's public statements. It is said there that 'The speeches given by the applicant which the respondent references were given in a business context by a non-lawyer where the underlying purpose of the speeches did not relate to taxation.' This is why the Tribunal would accept them as truthful. There was no taxation motive; no desire for a particular outcome driving the comments. If not true they would not have been made to a large audience. As with the authorities concerning expert evidence under s 79 of the Evidence Act 1995,4 which permit opinion from a party where it predates any suggestion of litigation, the Tribunal would rely on the untainted and motive-free statements the applicant voluntarily made." 68Ms Ensor relied on the decision of the Court of Appeal in Ghali v CCSR [2013] NSWCA 340. In that matter the Court of Appeal dismissed an appeal from the Appeal Panel of the ADT which had upheld an appeal by the Chief Commissioner from a decision in favour of Mr Ghali by a single member of the ADT. 69The facts found by the single member and apparently not disputed in either of the appeal cases were that Mr and Mrs Ghali purchased and lived together at a property at Harold Avenue, Pennant Hills (Harold Avenue). Mr and Mrs Ghali separated and shortly thereafter Mr Ghali purchased a property at Beecroft Road, Pennant Hills (Beecroft Road). It was Beecroft Road which was the subject of the land tax dispute. 70After purchasing Beecroft Road Mr Ghali occupied that property as his home. Mrs Ghali continued to occupy the former matrimonial home in Harold Avenue. Some time later Mrs Ghali asked Mr Ghali if he would renovate Harold Avenue in the way he had renovated Beecroft Road. Mr Ghali agreed. Mrs Ghali moved from Harold Avenue into Beecroft Road together with all her furniture and Mr Ghali moved into Harold Avenue. His only furnishings at Beecroft Road were a bed a kitchen table, clothes, toiletries and bed linen. 71The renovations took over six years to complete including the period relevant to the land tax dispute. At the end of the period Mr Ghali moved back into Beecroft Road and Mrs Ghali moved back to Harold Avenue. 72During the renovation period Mr and Mrs Ghali swapped residences twice each year. This occurred for about three weeks from 20 December to 10 January and for about the same period of time from mid-July to early August. Mr Ghali's explanation was that he wished to celebrate with members of his faith and entertain his friends at Beecroft Road at Christmas and on the anniversary of his purchase of Beecroft Road. 73In the course of his judgment Basten JA, with whom Tobias AJA and McDougall JA agreed, said at [44]: "The Appeal Panel also addressed the use made by the Tribunal of the "subjective intention of the taxpayer", stating: 36The other grounds mainly went to the issue of the extent of reliance the Tribunal placed on the subjective intention of the taxpayer. The case-law has acknowledged the relevance of subjective intention 'objectively ascertained' to the question of whether a place of occupation is a 'residence' and whether it can be regarded as the 'principal place of residence'... 37The Tribunal gave considerable emphasis to the respondent's long term intentions. It accepted the respondent's evidence that his intention was to return to live at Beecroft Road on a full-time basis once the renovations at Harold Avenue had been completed. 38The focus of the legislation is the living circumstances of those claiming the exemption in the relevant period. As this is an annualised tax system the focus is the circumstances on the taxing date, as reasonably informed by the period surrounding it on either side (see, for example, Gregory per Dixon J at 778 ('events which occurred before and after a given period may be considered as throwing light on and disclosing the significance of habits and conduct within the period'). 39Here the taxpayer left Beecroft Road around 2001 and was away for six years. His future intention to return to Beecroft Road involving such a distance in time should not, we consider, have been taken into account in the away that it was." 74The Court of Appeal said at [34] "an intention to use and occupy land in the future does not by itself demonstrate present physical use and occupation." The court also said: "12. Two facts on which the case turned were ultimately not controversial. First, the appellant divided his time in each year between Harold Avenue and Beecroft Road, spending 42 weeks in the former and six weeks in the latter. Secondly, he in fact lived primarily in Harold Avenue for some seven years for the purpose of carrying out renovations, with the intention that he would ultimately return to Beecroft Road and his estranged wife would then move to Harold Avenue." 45. Subjective intentions can indicate the nature or quality of activities carried out on the land: however, intentions as to the future will not overcome the absence of physical use and occupation in the relevant tax year. The Appeal Panel identified an error of law on the part of the Tribunal, by placing the use of future intentions into the proper statutory context. It did not deny that subjective intentions could be permissible considerations: it merely denied that intentions as to future use could, in the circumstances of this case, render that which was not use and occupation of the land to be use and occupation of the land as the appellant's residence in the particular tax years: cf Lo v Chief Commissioner of State Revenue [2013] NSWCA 180 at [9]-[10]. In this the Appeal Panel was correct. 46. To have a present intention to use and occupy Beecroft Road in the future was not inconsistent with a present intention to reside at Harold Avenue, where he in fact resided in the taxation years." 75It may well be that it was the intention of the Applicant both prior to and during at least part of the Relevant Period that she and her husband would at some time in the future use and occupy the Sydney Property as their principal place of residence. The importance of the expressed intention of the Applicant for the purpose of these proceedings is to be contrasted with the other evidence including her public statement in the Erick Johnston lecture in 2005, prior to the commencement of the land tax dispute, and the actual use she made of the Sydney Property during the Relevant Period. I find that from some time in 1997 until some time after she became aware of the relevant investigation by the Chief Commissioner in October 2011 the Applicant did not convert her expressed intention into fact in that she principally resided in locations other than the Sydney Property. 76As the Court of Appeal said in Ghali at [45] "intentions as to the future will not overcome the absence of physical use and occupation in the relevant tax year". I find that the "physical use and occupation" must be for the purpose of using and occupying the relevant property as not only a residence but as the Applicant's principal place of residence. 77I refer to Ms Ensor's submission at [53] that the Applicant has not claimed a principal place of residence exemption for any other property since moving into the Sydney Property (in about 1991 or 1992). I note that the only properties owned and used as a residence by the Applicant since that time were the Marina Property and the CBC Property. Both these properties are located in the Northern Territory. I agree with Mr Bennett's comment in [15] "that the applicant has not claimed a PPR exemption for any other property is of no moment; land tax is not applicable in the Northern Territory, and neither of the Broome properties were owned by the applicant." The fourth Ferrington factor - to occupy a home as his or her principal place of residence a person's occupation must have a degree of permanence to it: a connection to a place of residence of a transient, temporary, contingent or passing nature is not sufficient, nor is occupation for some other purpose. 78Ms Ensor submitted at [58]: "The Sydney Property was owned by the applicant for over 20 years and could not reasonably be characterised as transient or passing in nature. Further, the applicant's occupation of the Sydney Property was solely for the purpose of being the applicant's PPR. At no stage was the Sydney Property tenanted." 79The Respondent did not dispute the ownership of the Sydney Property from 1991 until November 2012. Nor did the Respondent submit that the Sydney Property was tenanted or otherwise used for income producing purposes. However the Respondent submitted that the use of the Sydney Property during the Relevant Period was to remain vacant for other than limited use in the Australian summer season for up to 1 month while the Applicant had ample use and occupation of the Marina Bay Property and the CBC Property and used the Sydney Property as a convenient place to stay while in Sydney on business or in transit. Mr Bennett submitted at [38(c)] that the use was not for the purpose of a personal residence but was "more akin to a sporadically visited holiday home". 80The Applicant at [242] described the Sydney Property as: "a gracious and historic home built in 1908 with 5-bedrooms, 4-bathrooms plus guest bathroom, a large open plan kitchen and family dining room & lounge, formal sitting room, formal dining room, large study/bedroom. It has a large outdoor paved area at the rear of the home and a very small lawn area at the front of the home. Cooking appliances are both gas and electric. Water heating is gas. Room heating is by gas.." 81At [92] and [94] she said: "At all times between 1990 and 2012, New Beach Road was our treasured family home, where we entertained our friends, held our important celebrations and where we could accommodate family and friends who came to visit. This lifestyle and these events did not occur anywhere else in our lives." "My wedding gifts and all family treasures were held in our family home. It took me many years to decorate it, through the collection of valuable antiques and artworks." 82I find that the Applicant's evidence including the Daily Calendar in MP1 and the Location Diary as to the use to which the Sydney Property was put, from 1997 and throughout the Relevant Period until at least 19 December 2011, is consistent with use as a showplace or trophy home used for entertainment and relaxation during the summer holidays, as a place for occasional special events such as her 60th birthday celebration, as a stopover place while in Sydney on business or in transit and as an occasional residence. By itself that usage is not conclusive evidence that the Sydney Property was used as the Applicant's principal place of residence. The fifth Ferrington factor - the short length of a person's residence, while relevant, is not determinative of the issue. ... occupation of a home, while short, may have the requisite degree of permanence to it. But that will not happen if, when considered objectively, the occupation was transient, temporary, contingent or of a passing nature, or for some other purpose. One may occupy premises for a short time on a transient, temporary, or contingent basis, but one can also occupy for a short time as one's principal place of residence. It is the nature of that occupation which provides the element of permanence. 83There is no dispute as to the lengthy period of ownership and control of access to the Sydney Property. The duration and nature of the use during the Relevant Period is dealt with elsewhere in this decision. The sixth Ferrington factor - the reasons for a person's departure from the home must be both reasonable and adequately explained when considered objectively in the light of their personal circumstances ... 84Ms Ensor submitted at [59]: "The applicant's reasons for departure from the Sydney Property were both reasonable and adequately explained when considered objectively in the light of her personal circumstances. The applicant's reasons for not residing at the Sydney Property were, to a large degree, out of her control due to her vast number of business commitments which required her presence in numerous locations, including many outside of Sydney." 85Mr Bennett responded in RS2 at [14]: "...the applicant's submission at [59] appears to be premised on the unsupported contention that the applicant departed the Sydney Property from around 2006 onwards for reasons out of her control, namely, to pursue her myriad business interests. This submission is ill-conceived for two reasons. First, the applicant's business interests cannot properly be characterised as matters outside her control; the evidence reveals that the applicant made a number of deliberate decisions to pursue a range of opportunities in Northern Australia, primarily in the accommodation sphere. Second, the applicant did not depart the Sydney Property to do so. As is revealed by the table at [49] of her submissions, ...., the applicant was living at the Cullen Bay Crescent property prior to her move to Broome." 86Ms Ensor made submissions at [40] in respect of continuity and the reasonableness of the Applicant's departure from the Sydney Property: "Continuous physical presence on the property is not required to constitute continuous occupation provided the taxpayer retains the right to controlled possession. In Flaracos v CCSR 2003 ATC 4348 Gzell J stated at [29]: In my opinion continuous physical presence on the land is not required to constitute continuous occupation. If a person leaves his or her premises for a holiday, it would defeat the purpose of the Act to conclude that occupation had ceased to be continuous. So long as the person retains the right to possession and controls possession, that person remains in occupation, in my view. The observation of Sir Nigel Bowen in Christie that physical presence over all the land is not necessary to establish occupation is equally apposite when there is some hiatus in physical presence over time. 87Flaracos concerned a taxpayer seeking an exemption from the imposition of land tax on his home on the basis that, since before the first day of July that last preceded the commencement of the relevant tax year, the relevant land had been continuously used and occupied by him for residential purposes and for no other purpose or the Chief Commissioner should be satisfied that the relevant land had been used and occupied by him as his principal place of residence. 88The evidence before Gzell J was to the effect that the taxpayer lived in his home and rented part of it for periods to provide some money because he was unemployed. The evidence was that renting the house was always temporary. The taxpayer slept at the home for security. He left the home at times and lived in cheap accommodation while looking for work, on occasions for 2 - 3 months at a time. He also went on holidays on occasions and rented the home on some of those occasions. On each occasion that the taxpayer left the home he returned to it to resume his physical presence. His Honour found at [23] that the home "was used as his sole and therefore, his principal place of residence". 89The Applicant said at [88]: "Basically, I was an itinerant, travelling from place to place specifically to perform my work and the duties for which I was responsible. I travelled wherever I was required in order to fulfill my various responsibilities for .... These trips were of varying duration, according to the requirement or task to be performed by me. These trips included trips to Darwin, Broome, Perth, Brisbane as well as overseas" 90The facts in Flaracos are substantially different to those in the current proceedings. The Applicant's own evidence is that in each tax year of the Relevant Period until calendar 2012 she resided at one or more of the properties owned or controlled by her for substantially longer periods than she spent at the Sydney Property. 91Ms Ensor submitted at [41] and [42]: "...a person can be away from their PPR while maintaining that particular residence as their PPR. In Re CCSR and Ghali [2012] NSWADTAP 20 the Appeal Panel stated at [33]: The cases dealing with the itinerant are instructive in this regard. It has long been recognised that the taxpayer may be involved in a calling or have other circumstances which take him or her away from their usual place of abode for extended periods, and that their sole or primary place of residence may be elsewhere... The noun itinerant is defined in the Macquarie Online Dictionary as "someone who travels from place to place, especially for duty or business" 92Mr Bennett's response at [37] included completing the phrase in [33] on which Ms Ensor ended, the Appeal Panel said: "...their sole or primary place of residence may be elsewhere (the usual example is the sailor on extended voyages, away from a permanent home on land):.... " 93Mr Bennett continued at [38] submitting: (a)the applicant is not a sailor or itinerant - but a professional who set her life in Darwin from 1997; (b)the applicant is not in Darwin on holiday - but in the Relevant Period was living her life there; and (c)the Property itself is more akin to a sporadically visited holiday home. Notably, the only Christmas the applicant spent at the Property was in 2011 (after the applicant became aware of the Chief Commissioner's investigation). 94I observe that the end of [33] in Ghali and the start of [34] included the following: "None of those cases carry the extra feature, present in this case, of the home itself being out of bounds to the itinerant for substantial periods of their absence. 34.Consequently, no arguable competing residences issue could in fact arise. His place of living - Harold Avenue - was for those weeks his place of residence on any reasonable view of the circumstances, albeit spartan. The fact that he returned to Beecroft Road for two limited periods in each year did not convert Beecroft Road into a residence in its ordinary sense." 95On the other hand Mr Bennett submitted that there are several properties owned or controlled by the Applicant which compete with the Sydney Property as the principal place of residence of the Applicant at different times during the Relevant Period. 96The Table of locations set out below shows that in each calendar year from 2006 to 2011 the Applicant slept for between 186 and 279 nights at a property owned either directly by her or by a company she controlled. The number of nights spent at the Sydney Property varied from 10% to 28% of the total nights spent at properties she or one of her companies owned or controlled. In 2012, after the investigation commenced, the Applicant slept at the Sydney Property for 84% of the 207 nights she spent at one or the other of her properties. However during the period 1 July 2011 to 31 December 2011, that is the 6 months immediately prior to the 2012 land tax year, the Applicant slept at the Sydney Property for 30 of the 184 nights. That is less than 17% of the time. Thirteen of the 30 nights were spent at the Sydney Property at the end of December 2011. I observe that the Applicant spent 116 nights of the 184 from 1 July to 31 December 2011 at the Hunter Property.

Black factor a. the amount of time that the residence is occupied and the pattern of occupation 97Ms Ensor submitted AS1 at [49]: "On an objective assessment, in light of the circumstances relating to the actual occupation of the Sydney Property, where the applicant spent her midnights and the attendant utility usage demonstrates that the Sydney Property was, at all material times the applicant's PPR. Where the applicant spent each midnight for the 2006 to 2012 years is detailed at Tab 7 of Exhibit MP1, and summarised below:" Location 2006 2007 2008 2009 2010 2011 2012 Total Sydney Property 48 18 54 30 66 63 174 453 1505/180 Ocean 0 0 0 0 0 0 21 21 Street, Edgecliff CBC 149 64 54 63 32 14 6 382 Hunter St, 0 0 0 0 25 202 6 233 Broome Lucas St, 0 104 153 170 111 0 0 538 Broome Hotel - Broome 50 15 0 0 0 0 0 65 Other AU 25 62 31 35 60 55 58 326 (hotel, camping, private accommodation) Hotel overseas 69 55 62 58 65 30 99 438 Transit 0 0 0 0 2 1 2 5 At sea 24 47 12 9 4 0 0 96

98The above table is also contained in the Agreed Statement. The years referred to are calendar years. 99Ms Ensor submitted that although the Applicant was the legal owner of the Marina Property she had not spent any nights there since approximately 2004. This was not contested by the Respondent. 100Ms Ensor submitted at [60]: "... the applicant's work commitments are substantial and require frequent travel. It is not denied that the applicant is away from the Sydney Property for extended periods of time for business, however, this alone does not prevent the Sydney Property from meeting the statutory requirements of being the applicant's PPR. Even when the applicant is required to travel for work, the Sydney Property is maintained as her PPR. For example, the applicant paid for the Sydney Property to be regularly cleaned between, at least 29 January 2008 and 13 July 2011." 101Mr Bennett responded at [14] and [15 (a) - (c)]: 14. As a consequence of this investigation, the Chief Commissioner arrived at the view that the applicant had moved back to Darwin in 1997 and made it her home from that time onwards. The move appeared to be motivated by both family reasons, with her mother's health failing, and business needs. 15. Information subsequently obtained supports these conclusions: a)Diaries: The applicant's diaries confirm that the vast majority of her time is spent in Northern Australia, with Sydney being her occasional location for a relatively brief period each summer and at other, fairly sporadic, times during the year. b) Bank transactions: The applicant's bank transactions, that provide an objective indication of her location at any given time, also confirm the applicant living in Northern Australia. Very few of the applicant's bank transactions occurred in Sydney. c) Offices held: the applicant has served on boards in Darwin throughout the Relevant Period." 102In the Christie sense, that is, concerning 'possession' and 'control', both the CBC Property and the Sydney Property were continuously 'occupied' by the Applicant throughout the Relevant Period. The evidence is that cleaning and security services were provided at both properties whether or not they were vacant and the Applicant controlled access. Both properties were insured as were their contents. 103The extent to which the properties were used as a "residence" by the Applicant is summarised in the Table of locations. The relatively few nights spent at the Sydney Property by the Applicant, or her husband, in comparison with the use as a residence of other properties she owned or controlled, do not provide substantive support for the Applicant's claim that that property was used as her principal place of residence, other than in calendar 2012. 104I find that the pattern of use of the Sydney Property, predominantly during the Sydney summer holiday period or concurrently while transacting business dealings in Sydney or while in transit through Sydney is indicative although not by itself conclusive evidence that the Applicant did not use the Sydney Property as her principal place of residence from 1 January 2006 until 19 December 2011.

Black factor b. the listing of the address of the person, for official purposes such as on a licence or on an electoral roll 105Ms Ensor submitted at [61]: "The applicant is registered in NSW to vote in both federal and state elections for the electorates in which the Sydney Property is situated. For convenience, the applicant renews her driver licence in the location she is in at the time of its expiry. That the applicant does not have a NSW driver licence is not alone conclusive evidence that the Sydney Property is not her PPR." 106Electoral records in evidence show the Applicant's electoral address was the Sydney Property from 1992 to 1999 and in 2006, 2007, 2008, 2010 and 2012. Mr Grbavac's electoral address is shown as the Sydney Property in 2012. 107Ms Ensor also submitted at [68]: "It is the applicant's evidence that 49 out of 55 addresses listed with the Australian Securities and Investments Commission (ASIC) for the applicant as director or shareholder are the Sydney Property, being 89%. The ASIC records in evidence record the Sydney Property as the applicant's address at least 77 times for director, secretary and alternate director positions held, shareholdings and former shareholdings, and director positions formerly held." 108The s. 58 documents include an ASIC personal name extract dated 4 September 2012 in respect of the Applicant. This provides numerous entries showing the Applicant as a director or former director of various companies. The substantial majority of the entries show her address as the Sydney Property. However her address is also shown as the Marina Property from as early as December 1998 until as late as September 2012 as well as an address at Bellevue Hill Sydney in 1996 and 1997, sometime after the purchase of the Sydney Property. 109 At page 1308 of the s. 58 documents is an ASIC form 484 recording a change to details of a particular company. The form bears an ASIC receipt stamp dated 12 November 2007 at the Northern Territory office of ASIC. The form was signed by a director of the company. The form records that the Applicant ceased being a director and Mr Grbavac was appointed in her place with effect 30 October 2007. The typed details refer to Mr Grbavac's first given name and surname and provide his residential address as the Sydney Property. In handwriting which appears different from that of the director who signed the form, Mr Grbavac's middle name has been inserted together with his date of birth and place of birth and the Sydney Property has been deleted as his residential address and has been replaced with the CBC Property address. Mr Grbavac informed the Tribunal that he could not recall writing on the document. However he did acknowledge that the handwriting containing the change of address and the insertion of his middle name and date and place of birth may be his handwriting. I observe that an ASIC historical personal name search extracted in September 2011 for Mr Grbavac shows his address at that time as the CBC Property. 110The Applicant stated at [210]: "Throughout the period of 1990 to 2012, the personal address of Marilynne Paspaley has been New Beach Road, Darling Point and for accounts, GPO Box 338, Darwin NT 0801." And at [215] "The address of CBC is a mail address for convenience." 111The Applicant sought to provide corroborative evidence as to her residential address at [218]: "CBA Corporate Solutions Executive Corey Barlow-Jensen also confirms this on 24 August 2012, where he ... states that it is his understanding that my PPR in May 2009 was New Beach Road, Darling Point and that this was unchanged for the three years between 2007-2009 when he was my Relationship Manager. [OSR Tab 52 page 635] 112At page 638 in the s. 58 documents is a letter dated 24 August 2012 signed by Mr Barlow-Jensen. There is no evidence as to MR Barlow-Jensen's work location during the period in which he was relationship manager for the Applicant, nor the factual basis for his relevant opinion or understanding, nor the basis for his opinion as to what a 'principal place of residence' is for the purposes of the LTM Act. The evidence is that during the 3 years leading to May 2009 the Applicant spent about 120 nights at the Sydney Property out of 1,095 nights, that is, she resided at the Sydney Property for less than 11% of the relevant period. (Location Diary and Daily Calendar). 113Mr Barlow-Jensen's letter also stated "it was well known by me that she spent minimal time in Darwin". Presumably this relates to the three-year period leading to May 2009. The Applicant's evidence in Tab 7 of MP1 is that in the three years to 31 May 2009 the Applicant spent about 260 nights at the CBC Property, more than double the number of nights at the Sydney Property. 114Having regard to the evidence of the Applicant's Location Diary and Location Calendar I do not accept as accurate Mr Barlow-Jensen's statement as to the Applicant spending minimal time in Darwin. Nor do I accept the accuracy of his expressed 'understanding' as to the location of the Applicant's principal place of residence. 115Mr Bennett submitted at [15(e)] Driver's Licence: The applicant has never held a NSW driver's licence, but had her Northern Territory drivers licence transferred to Western Australia on 24 August 2009. Those licences have listed the Darwin Home, and also Unit 10, 57 Marina Boulevard, Larrakeyah, NT 0820, as her address." 116Ms Ensor submitted at [63] "During the relevant years, both the applicant's personal car and company car were garaged at the Sydney Property". This is an excerpt from paragraph 14 (g) of the objection. It is not supported by any documentary evidence such as registration papers. 117The Applicant's evidence at [257] was "I very rarely drove in Sydney because I was not confident with the traffic and didn't enjoy the experience. I travelled to work on public transport or by taxi. My husband always drives when we are both in the car." 118At [257] the Applicant also said "I did not change over the license in NSW when we moved from Melbourne. I didn't think it important and relied on my Victorian driver's license." 119I observe Mr Grbavac's written evidence was that he registered his address for his driver's licences wherever was convenient at the time. He changed from a New South Wales drivers licence to a Northern Territory licence at about July 1997 and transferred his licence back to New South Wales in about 2012. 120I do not propose commenting on the legal requirements for a resident of New South Wales to hold a driver's licence issued by the relevant New South Wales statutory authority. However the evidence by both the Applicant and Mr Grbavac that they renew their respective licences based on where they are at the time that their then current licence expires does not indicate any particular connection with the Sydney Property. 121I note that addresses used by the Applicant include the Sydney Property, the Marina property, the CBC Property and the Darwin post box. The use of different addresses for different purposes and the change of address for the same purpose at different times does not show any particular pattern which supports the Applicant's claim that her principal place of residence is the Sydney Property, nor is it of itself fatal to the claim.

Black factor c. respective rights in respect of multiple properties 122The parties agreed that throughout the whole of the Relevant Period: (1) the Applicant was the sole registered proprietor of both the Sydney Property (until its sale in November 2012) and the CBC Property; (2)Both properties were zoned for residential use; (3)The Applicant had unrestricted access to both properties and could use either property as a residence for herself and her family whenever she chose. 123There was no evidence before the Tribunal that either property was leased to any person during the Relevant Period nor that either property was used for any income producing a purpose. 124The Lucas Street Broome property at which the Applicant and her husband resided was at all relevant times leased by a company effectively controlled by the Applicant. The Hunter Street Broome property at which the Applicant and her husband resided was at all relevant times owned by a company effectively controlled by the Applicant. The use of these two Broome properties while the Applicant resided there was within the control of the Applicant. There is no evidence that the Applicant exercised her power to retain exclusive use of living accommodation in either of the Broome properties for her family. Rather the evidence is that staff were permitted to use for various purposes part of the living accommodation utilised by the Applicant and her husband.

Black factor d. relative location of clothing, furniture and possessions 125Ms Ensor submitted at [63]: "During the relevant years, the Sydney Property was the only property owned by the applicant where each of her children had a dedicated bedroom. Further, the Sydney Property housed the Paspaley family personal belongings, memorabilia, photos and history, including the applicant's wedding gifts, family treasures, valuable antiques, and artworks. During the relevant years, both the applicant's personal car and company car were garaged at the Sydney Property. By contrast, CBC is furnished with the prior owners' furniture which the applicant purchased from them for a low price." 126Although the Applicant said that each of her children had a dedicated bedroom at the Sydney Property no evidence was led as to how often the children, who lived independently of the Applicant during the Relevant Period, visited the Sydney Property or used those bedrooms. Nor is there any evidence as to the extent to which any other person used those bedrooms at any time during the Relevant Period. 127I note the Applicant's comments in relation to the furnishing of the CBC Property and her evidence that the furniture was of minimal value having been acquired from the vendors for a 'low price'. However the contents were apparently considered valuable enough for the Applicant to have insured them for a substantial sum during the Relevant Period. I observe that the insurance cover was reduced from $650,000 to $450,000 in November 2011 after artwork was relocated. The Applicant provided no evidence regarding the apparent discrepancy between the nature or value of household contents, presumably including clothing, furniture and other personal possessions and the low price of acquisition of the furniture. 128The insurance issue is dealt with at Black factor i. below as is the issue of valuable possessions owned by the Applicant or under her immediate control. 129The Applicant's evidence refers on numerous occasions to her extremely busy high profile business activities in many parts of Australia and overseas during the whole of the Relevant Period and for many previous years. However there is scant evidence as to the location of the Applicant's clothing or personal effects that she actually used throughout the Relevant Period. The information in the Agreed Statement and the Location Diary indicates that the Applicant stayed overnight at the Sydney Property on 224 days of the 1614 days in the period between 1 July 2007 and 31 December 2011, that is less than 14% of the period. It seems unlikely that the Applicant would hold a substantial part of her clothing and personal effects at a location she did not attend for over 85% of a 4 ½ year period and which she did not visit for several consecutive months on several occasions during the Relevant Period including a period of more than eight months from 8 March to 24 November 2007. 130Mr Grbavac's written statement from [18] to [21] includes, in relation to "clothing, furniture and possessions" "Marilynne and I spent many years furnishing, decorating and renovating the property since it was purchased. For instance, Marilynne collected antique furniture and precious art for the property which was specific for the property and always remained at the property for the entire period during which we lived there and until it was sold after 22 years of ownership. Our family possessions were collected and kept at the property and remained at the property. Personal items such as family photographs, collectables, children's toys, books, music collections, wedding gifts etc. were collected, kept and used at the property by the family for the entire period." 131The Table of locations shows that the Applicant resided at the CBC Property in 2006, 2007 and 2009 more frequently than she resided at the Sydney Property, the number of nights used in each property in 2008 was the same and from 2010 to 2012 she resided at the Sydney Property more than the CBC Property. I also observe that both the hydraulic services expert report and the electrical services expert report tendered in evidence indicated that the instructions they had received included the location of a large commercial refrigerator in the garage of the CBC Property which acted as a drinks fridge and two wine fridges all of which ran 24/7/365. 132I find that the evidence for the Applicant in relation to family memorabilia, artwork and other valuable possessions being located at the Sydney Property is as consistent with that property being regarded and used by the Applicant as a trophy, entertainment or holiday venue as it is that the Sydney Property was used as her principal place of residence for the purpose of eating drinking and sleeping.

Black factor e. where family members reside 133The undisputed evidence is that Mr Grbavac, travelled and resided with the Applicant at all relevant times. The Applicant's children were at all relevant times adults who lived independently of the Applicant. Accordingly for the purposes of the LTM Act the Applicant and Mr Grbavac comprise a family (clause 12 of Sch 1A). 134The evidence as to where the Applicant spent each midnight for the 2006 to 2012 years is referred to elsewhere in this decision. 135Mr Grbavac's evidence at [16] in his statement is that he and the Applicant have routinely spent over 150 days per year travelling for their work from 1990 until about March 2014. This evidence should be compared and perhaps contrasted with the evidence in the Table of locations as to where the Applicant spent each midnight for the 2006 to 2012 years. 136To the extent that the Applicant's family travelled with the Applicant at all material times this does not provide additional evidence supporting the Applicants submission that the Sydney Property was used as the principal place of residence of her family.

Black factor f. the strength of ties and connection with the residence. 137Ms Ensor submitted at [65] that the Applicant housed at the Sydney Property "her family's treasured belongings and valuable items, clearly demonstrating the applicant's strong ties with the Sydney Property." 138I accept that the evidence is that other than in relation to artwork the property of the Applicant's superannuation fund which was held at the CBC Property for most of the Relevant Period much valuable artwork and family memorabilia was held at the Sydney Property throughout that period. 139However the statements of intent and location of family memorabilia, valuable artwork and furniture and retaining a bedroom for each of her adult independent children at the Sydney Property are not of themselves conclusive evidence that that property was in fact used for any particular period as the Applicant's principal place of residence for the purposes of Schedule 1A of the LTM Act.

Black factor g. utilities usage. 140The Applicant tendered an electrical services expert report and a hydraulic services expert report comparing usage of electricity and gas and water at the Sydney Property with the usage of these resources at the CBC Property. 141In summary the electrical services expert concluded that the energy consumption for each property was consistent with the occupation information provided and "the much higher electricity consumption for "the CBC property" can be attributed to the fact that it is an all electric household and the amount of electrical equipment that needs to operate in periods of non-occupancy". This report did not compare the usage of electricity at either property with a "typical" property in the relevant location. 142The Applicant said at [244] "The usage of utilities in Sydney and Darwin was typical of residences of those sizes in those locations." There is no evidence to support this opinion in relation to electricity use and the expert's statement in relation to water use substantially contradicts the opinion. 143The hydraulic services expert concluded in summary that the water usage patterns for the Sydney Property and the CBC Property consistently demonstrated a greater usage than that of an average two person household per annum being respectively 1617% and 144% above the average annual usage for a two person occupancy. He also concluded that a large part of the CBC Property water usage can be attributed to the large grounds which require considerable amount of irrigation water. 144 Ms Ensor submitted at [49] to [52]: "On an objective assessment, in light of the circumstances relating to the actual occupation of the Sydney Property, where the applicant spent her midnights and the attendant utility usage demonstrates that the Sydney Property was, at all material times the applicant's PPR. Comparison of electrical energy usage of the Sydney Property and CBC is made difficult by the fact that, uniquely to CBC, its geographic location impacts on cooling and ventilation requirements, it is an all electric household, it has extensive grounds requiring irrigation, and it has a greater number of items requiring continued operation during non-occupancy. As CBC consumes substantially more energy than the Sydney Property both when occupied and unoccupied, the actual energy consumption has been determined to be consistent with the occupation information. While the water usage of both the Sydney Property and CBC is above average for a 2 person residence, a large part of the CBC water usage is attributable to its large grounds which require considerable irrigation. No direct comparison of gas usage can be made as CBC does not use gas." 145Mr Bennett submitted at [15(k)] "Utilities: A comparison of the electricity and water used at the Property and at the Darwin Home shows significantly more electricity and water usage at the Darwin Home. Two reports ...have been filed.... their conclusions appear to be that the Darwin Home was intensely used throughout the Relevant Period." 146It is common ground that both the electricity and water usage at the CBC Property exceeded the relevant usage at the Sydney Property. Having regard to the different climates in Darwin and Sydney, the disparate size of the respective properties, the lack of gas at the CBC Property and the Applicant's evidence as to the extent of her use of the Sydney Property as a residence this evidence is of no particular significance to the issue before the Tribunal.

Black factor h. the address to which bills are sent 147Ms Ensor submitted at [67] the following: "The applicant's bills were sent to the Sydney Property from: a) the Australian Taxation Office for the 2006 to 2010 financial years; b) the Roads and Traffic Authority as at 31 August 2011 ; c) AGL between approximately January 2008 and January 2013; d) Telstra between 28 October 2009 and 1 March 2010; e) Sydney Water between 1 July 2005 and 4 September 2007; and f) CBA between 2009 and 2012" 148I observe in relation to the address for bills from the ATO, that the Applicant's residential address was given as the Sydney Property for the 2006-2010 financial years. However during that period the Applicant's postal address for the ATO was care of several different Deloitte Group firms or companies at various post office boxes in Sydney for 2006 and 2007 and at Parramatta for 2008 - 2010. 149Although bills for gas usage at the Sydney Property were sent to that address, the evidence is that electricity bills for the Sydney Property were sent to the Applicant at the Darwin post box between November 2005 and February 2011 (s. 58 documents at pages 187 to 208). 150Notwithstanding Ms Ensor's submissions regarding water bills between July 2005 and September 2007 being sent to the Sydney Property, the water bills from October 2007 to December 2010 were addressed to the Applicant at the Darwin post box (pages 220 to 236 of the s. 58 documents). 151Ms Ensor explained the use of the Darwin post box by the Applicant at AS1 [69] where she said: "To the extent to which some of the applicant's mail is sent to an alternate address, this alone is not determinative in evaluating whether the applicant used and occupied the Sydney Property as her PPR. GPO Box 338, Darwin NT 0801 belongs to the Paspaley Pearling Company, of which the applicant is a director. Due to the applicant's frequent travel, the applicant uses this GPO box for some utility accounts to ensure timely payment is achieved by the accounts support team of Paspaley Pearling Company, which is based in Darwin." 152I note the statement by the Applicant at [211]: "Due to my business-related travel schedule, the address of GPO Box 338, Darwin NT is used predominantly for utility accounts to ensure timely payment by the accounts support, which is based in Darwin. This post office box belongs to Paspaley Pearling Company and is also used as a family office address for director's personal accounts and correspondence. The staff at Paspaley Group are authorised to distribute personal mail to directors wherever they are at any time and by whatever means necessary." 153I note the evidence by the Applicant and the submissions by Ms Ensor in relation to the use of the Darwin post box for utility mail. I also note that the evidence shows a lack of use of a consistent address by the Applicant for such mail. I accept Ms Ensor's submission that sending mail to an alternate address is not by itself determinative in evaluating whether the Applicant used and occupied the Sydney Property as her principal place of residence. However the failure to use the Sydney Property address as a postal address does not support her claim that that property was during the Relevant Period her principal place of residence nor is it fatal to that claim. Black factor i. the nature of insurance held for each property 154Ms Ensor submitted at [70]: "The applicant held insurance for the relevant years for both the Sydney Property and CBC. The policies for the Sydney Property between 30 September 2007 and 30 September 2008, and 30 September 2009 and 30 September 2010, specifically permitted absences of more than 90 days due to the applicant's need to travel for business. From 30 September 2007 to 30 September 2009, only the property contents for the Sydney Property were itemised. From 30 June 2007 to 30 September 2011, and 31 October 2011 to 30 November 2012, both the building and contents aspects of the insurance were substantially greater for the Sydney Property than for CBC. The insurance policy for household contents remained consistent until late November 2011 when the CBC insurance was reduced and the Sydney Property insurance increased. This was due to the transportation of a number of artworks held as superannuation from storage at CBC to storage at the Sydney Property following water penetration to the CBC storage room." 155Mr Bennett referred at [13] to information provided to the Chief Commissioner on 9 December 2011 in support of the Applicant's claim for principal place of residence exemption. The information included the following statements: "The insurance policy for the Property permits absences of up to 90 consecutive days as opposed to the usual 60 day period and that the Property has a 'caretaker' who inspects the Property three times a month" and "The applicant maintained contents insurance for $675,000 of her household items at the Darwin Home." 156I observe that the Applicant's evidence in MPP 1 at [187] is that the household contents insurance at the CBC Property was reduced from $675,000 to $450,000 for the 12 month period commencing 30 November 2011. She stated "The difference is due to the movement of several art works from storage in Darwin to my home in Sydney." 157I also observe that notwithstanding the Applicant's evidence at [241] implying that the accommodation at the CBC Property is not particularly satisfactory she acknowledged in that paragraph that she used that property as a residence in Darwin from 2004 and, notwithstanding the movement of artworks from the CBC Property, she maintained contents insurance on the CBC Property with a value of $450,000 from November 2011and $650,000 for some prior years. 158Segments of three Householders (Accidental Damage) are in evidence in the s. 58 documents. They respectively cover the periods September 2007 to September 2008, September 2008 to September 2009 and September 2009 to September 2010. The first policy does not identify any particular properties covered other than the Sydney Property. The second policy identifies 13 properties including the Sydney Property and the third policy identifies 18 properties including the Sydney Property. The CBC Property is specifically referred to in each of the second and third policies. Neither of the Hunter Street Broome nor Lucas Street Broome properties are listed in any of the policies. The second and third policies each specify certain contents located at the Sydney Property but none of the contents of other properties. 159Two of the policies refer to an extension of the usual 60 day period of unoccupancy before restrictions begin to operate being extended to a 90 day period. Each of those policies contain the following "special note" in relation to the Sydney Property "it is noted and allowed that this situation may be unoccupied for more than 90 consecutive days. The Insured has a cleaner that visit (sic) the premises once per week and a caretaker inspects the premises about three times a month". 160The listing in household insurance policies of specific contents in the Sydney Property but not the CBC Property evidences the value placed by the Applicant on the Sydney Property contents being greater than the value she placed on the contents of the CBC Property. This may assist the Applicant's substantive argument. However the extension of the period of unoccupancy for the purpose of insurance policy restrictions evidences a lack of intention to occupy or use the Sydney Property as a residence for substantial periods of time.

Black factor j. where the person eats, drinks and sleeps 161Ms Ensor submitted]: 31. Although a person's place of residence may be usually understood as "the place where he eats, drinks and sleeps" , the definition of PPR in s 3(1) of the Act recognises that a person may reside at more than one place during a land tax year. A person can, however, have only one PPR.1 32. Whether a property is a taxpayer's PPR is a question of fact and degree to be determined on an objective view of the evidence before the Tribunal, having regard to the extent and quality of the residences' use and occupation. 33. While the respective amounts of time which the taxpayer spends in each residence is a relevant factor, it is not the only factor relevant to the determination of a PPR." 162At [48] Mr Bennett submitted that the Applicant "mainly eats, drinks and sleeps" at the Darwin and Broome properties. He also submitted that the use of the Sydney Property by the Applicant for eating, drinking and sleeping was "minimal". 163The Agreed Statement supports Mr Bennett's submission in that in no tax year during the Relevant Period until 2012 did the Applicant remain overnight at the Sydney Property on more occasions than she was located at one or more of the Darwin or Broome properties. In 2012 the Applicant resided at the Sydney Property more than for any previous period for which records were produced. Perhaps, as the Respondent submitted, the underlying reason was the investigation by the Chief Commissioner. However, the Applicant submitted the reason was that by that stage she was in a position to leave certain business activities, in which she had spent a great amount of time, to other persons. There may have been some other reason or it may merely have been a coincidence. However notwithstanding the amount of time spent at the Sydney Property during 2012, in respect of the 2012 tax year the Applicant's evidence is that she resided at that property during the period 1 July 2011 to 31 December 2011 for 27 days, including 13 days from 19 to 31 December, at the CBC Property for 6 days and at the Hunter St property for 117 days. This is relevant to the requirements of clause 2(2)(a) of Sch 1A. 164I accept Ms Ensor's submission that the amount of time which the taxpayer spends in each residence is not the only factor relevant to the determination of a principal place of residence. I also note that in Black Hirschhorn JM said at [86(a)] "The Tribunal notes other decided cases in this area that have held that merely sleeping at a property does not make the property a "principal place of residence". 165I am also aware that the ADT held in Carey v Chief Commissioner of State Revenue [2010] NSWADT 78 that the taxpayers' principal place of residence was determined by the residence in which the taxpayers spent most of their time and their pattern of correspondence in respect of their bills. These factors outweighed other factors including their intent to occupy a particular residence as their principal place of residence. 166In McNally & Anor v Commissioner of State Revenue [2003] NSWSC 1118 the Supreme Court dealt with a case in which a married couple claimed that their principal place of residence had changed from their Greenwich residence, at which they spent four days per week to their Noraville residence at which they spent three days per week. Gzell J said that what tipped the balance against the taxpayers was that they cohabited together at both residences. "42 Here we have a married couple spending a majority of their time per week in what had indisputably been the principal place of residence of both of them in the past and an extended weekend in premises enjoyed by them for their annual holidays." "43... In my view, the plaintiffs have not discharged their onus of establishing that Mr McNally had relinquished Greenwich as his principal place of residence and had adopted the Noraville residence in its stead. I am of the view, therefore, that the plaintiffs have failed to establish their principal proposition." 167The time spent using and occupying a residence as a residence is not a factor which should be treated as of no material importance or disregarded. In Yen-Cheng Chuang & Anor v Chief Commissioner of State Revenue [2009] NSWADT 160 Verick JM said at [19] "A person's place of residence is usually understood as "the place where he eats, drinks and sleeps" (per Ridley J in Stoke-On-Trent Borough Council v Cheshire County Council [1915] 3 KB 699 at 706)." The Appeal Panel in Chief Commissioner of State Revenue (RD) v McIlroy [2009] NSWADTAP 21 said at [41] when considering a matter involving which of two residences was the principal place of residence of the taxpayer "the likelihood of the more usual state of affairs, namely, that a person's principal place of residence is where he or she spends the most time, and which is shared (where applicable) with his or her spouse and children." 168The LTM Act does not provide any technical or legal meaning for the expression "principal place of residence". Accordingly, the expression has its ordinary meaning. Decisions referred to above have held that a person's place of residence is usually understood as "the place where he eats, drinks and sleeps" and the use of the term "principal" in the expression suggests that a person may use and occupy more than one residence but that the exemption is only available for the principal place of residence of the person. 169Most importantly it is necessary to have regard to the wording of the legislation itself. That is, subject to the satisfaction of the Chief Commissioner in clause 2 (2) (b) of the Schedule, land is not used and occupied as the principal place of residence of a person unless the land has been continuously used and occupied by the person for residential purposes since one July in the year preceding the tax year in which land tax is levied. It is also a requirement of the subclause that no other land has been continuously used for that purpose during that period. 170The evidence of the Applicant is that she spent a relatively small amount of time residing at the Sydney Property both in absolute terms and as a comparison to the time she resided at other residences she owned or controlled. This does not assist her claim.

Black factor k. where a person entertains friends 171Ms Ensor submitted at [72]: "The applicant entertained friends at the Sydney Property, and not at any other property. The applicant held the majority of annual family celebrations at the Sydney Property between 2006 and 2012. Further, the applicant's mother would regularly visit her at the Sydney Property until the applicant's mother was too ill to travel. As a busy professional with many work obligations, the applicant travelled for work regularly during the relevant years. The applicant's location for important annual family events over the years in question is tabulated below. This demonstrates that the applicant was present at the Sydney Property more regularly on these events than in any other location, excluding hotels. In particular, the special occasion of the applicant's 60th birthday was celebrated at the Sydney Property." Year Mr Grbavac's birthday (24 January) Easter Sunday Birthday (25 April) Christmas New Year's Eve 2006 Sydney Property 16 April - Overseas hotel on business Overseas hotel on business Broome hotel on business Sydney Property 2007 Broome hotel on business 8 April - Kununurra hotel on business CBC Property Overseas on business Sydney Property 2008 CBC Property 23 March -Sydney Property Lucas St Broome CBC Property Sydney Property 2009 CBC Property 12 April - Lucas St Broome Lucas St Broome CBC Property CBC Property 2010 Sydney Property 4 April - Perth hotel on business Overseas hotel on business Overseas hotel on holiday Overseas hotel on holiday 2011 Transit - travelling from USA to Sydney 24 April - Hunter St, Broome Hunter St, Broome Sydney Property Sydney Property 2012 Hunter St, Broome 8 April - Perth hotel on business Sydney Property Overseas hotel on holiday Overseas hotel on holiday

(The above table is retyped with the data from AS1 and abbreviations used in this decision) 172Mr Bennett submitted at [48] in relation to the Darwin and Broome properties "Presumably, the applicant entertained friends at this property at the taxing dates because she spent her time there" and in relation to the Sydney Property "The applicant states that she entertained friends during her visits to Sydney." 173Mr Bennett provided no evidence to support his presumption. I observe that although it may be thought somewhat unusual for a senior businesswoman in the hospitality industry not to entertain friends at the residences in which she lived for more than 85% of the time over a period of several years, that is the Applicant's sworn evidence and there is no contrary evidence. 174However the Applicant's evidence does not necessarily mean that the Sydney Property in which she entertained friends, when she was there, was for any relevant period her principal place of residence rather than a trophy or holiday location. 175I refer to Ms Ensor's submission that the majority of annual family celebrations were held at the Sydney Property between 2006 and 2012. The schedule provided by Ms Ensor at [72] showed that between July 2007 and December 2012 the Sydney Property was used for the Applicant's husband's birthdays on one of six occasions, Easter Sunday was celebrated on one of five occasions, the Applicant's birthday was celebrated at the Sydney Property on one of six occasions as was Christmas Day. New Year's Eve was celebrated on three of six occasions during that period. The Applicant's evidence does not support the submission. 176It may well be that the Applicant's mother regularly visited the Applicant at the Sydney Property until she was too ill to travel (AS1 at [72]). However the Applicant's evidence is that her mother fell gravely ill and was hospitalised in April 1997. By that time she was under 24 hour care in her home. The Applicant purchased a home in Darwin to be within walking distance of her mother's home. The Applicant's evidence is that her mother passed away in September 2003. There is no evidence that the Applicant's mother visited the Sydney Property at any time after 1997. In any event, for the purpose of clause 8 of Sch 1A, which is dealt with below, the relevant date for commencement of occupation for the first of the tax years under consideration is 1 July 2007, nearly 4 years after the Applicant's mother passed away. The evidence does not support the Applicant's case.

The Chief Commissioner's discretion in clause 2(2)(b) 177The LTM Act provides a discretion for the Commissioner in clause 2 (2) (b) of the schedule to determine that land is used and occupied as the principal place of residence of a person if the Chief Commissioner is satisfied that the land is used and occupied by the person as the person's principal place of residence even though that land and no other land was continuously used and occupied by the person for residential purposes from one July in the year preceding the tax year in which land tax is levied. 178The written submissions on behalf of the Applicant addressed the operation of the discretion in these proceedings at [72] and [79]. 179At [72] Ms Ensor submitted "even if clause 2(2)(a) of Schedule 1A of the Act does not apply, the Chief Commissioner should have been satisfied that the Sydney Property was used and occupied by the applicant as her PPR." 180At [79] the submission was "The applicant submits that on the facts detailed above the respondent should have been satisfied that: (a)the applicant used and occupied the Sydney Property as a PPR for a continuous period of at least 6 months, as the Sydney Property was the applicant's PPR from 1 July 2000 to January 2012; and (b)no income was derived from the use or occupation of the Sydney Property in the preceding tax years. 181The substantive issues raised by the "facts detailed above" in the first 20 pages of AS1 are dealt with elsewhere in this decision. 182Mr Bennett submitted at [51] - [52]: The purported discretion in clause 2 (2) (b) of the Schedule is not a true discretion as it will be dictated to by the facts of the case. In Chief Commissioner of State Revenue of the Aldrige [2003] NSWADTAP 50 at [26] the Appeal Panel held (in relation to the former provision of the Act that was in the same terms as clause 2(2)(b)): Section 3(3)(b) of the Act does not confer a true discretion on the Chief Commissioner. If the evidence of the factual circumstances supports that a particular parcel of land or a flat is used and occupied by a person as the person's principal place of residence (as defined in s 3(1) of the Act) as at midnight on 31 December in a particular year, the Chief Commissioner must be satisfied of that fact. If the factual circumstances do not support that a particular parcel of land or a flat is used and occupied by the person as the person's principal place of residence as at midnight on 31 December in a particular year, the Chief Commissioner cannot be satisfied of that fact. Thus, in the present case, where the facts outlined above establish that the Northern Territory properties were the principal place of residence at the taxing date then the applicants do not satisfy the requirements of clause 2(2)(b) of the Schedule." 183The discretion in clause 2(2)(b) is to be exercised in the context of the objects of the relevant legislation. The LTM Act was enacted "to make provision relating to the imposition, assessment and collection of a land tax upon unimproved values of certain lands ..." Section 7 of the LTM Act provides: "Land tax at such rates as may be fixed by any Act is to be levied and paid on the taxable value of all land situated in New South Wales which is owned by taxpayers (other than land which is exempt from taxation under this Act)." 184Sch 1A of the LTM Act provides for an exemption from taxation in respect of the principal place of residence of a taxpayer. The schedule also provides for concessions and restrictions in relation to the applicability of the exemption. 185To the extent that the Applicant has demonstrated that the Sydney Property was an available place of abode for her on a continuous basis she has satisfied a necessary but not sufficient condition to establish that the Sydney Property was her principal place of residence. It is also necessary for her to establish that it was actually used as her residence or that of her family in accordance with clause 2(2)(a) or that one of the concessions in Sch 1A applies or that the Chief Commissioner should be satisfied in accordance with clause 2 (2) (b). 186Having regard to the evidence before me, the findings I have made above and the submissions on behalf of the parties I am not satisfied that the discretion in clause 2(2)(b) should be exercised in favour of the Applicant for any tax year during the Relevant Period. The Applicant's first alternative submission - the concession for absences from former residence applies such that the PPR exemption applies to the Sydney Property 187At [79] the Applicant submitted : "..on the facts detailed above the respondent should have been satisfied that: the applicant used and occupied the Sydney Property as a PPR for a continuous period of at least 6 months, as the Sydney Property was the applicant's PPR from 1 July 2000 to January 2012; and no income was derived from the use or occupation of the Sydney Property in the preceding tax years." 188The Respondent submitted at [57]: "Clause 8 applies to absences from the principal place of residence. It does not apply to the Property on the taxing date because: (a) The applicant has not established her use and occupation the Property as her principal place of residence for a period of at least 6 months before one of the relevant the taxing dates - the evidence is clear she has lived in Darwin or Broome since 1997: it therefore fails clause 8(1)(a) of the Schedule. (b) The applicant's principal place of residence was the Northern Territory properties, the Darwin Home: the Property therefore fails clause 8(1)(b) of the Schedule." 189At [5] in RS2 the Respondent further submitted: "The Applicant argues that "'the Sydney Property was the applicant's PPR from 1 July 2000 to January 2012', which is required to apply the 6 year absence rule in clause 8 of Schedule 1A to the Act. The Chief Commissioner contends that the Property was not occupied as the applicant's principal place of residence for a continuous period from 1 July at any time after 1997. Clause 8 of the Schedule would therefore provide the applicant no comfort after the 2003 land tax year." 190Clause 8 of Sch 1A is set out at [7] above. I agree with the Respondent's submissions in the preceding paragraph to the extent that the evidence before the Tribunal does not satisfy me on the balance of probability that after 1997 until at the earliest, in the period from 19 December 2011 to 18 June 2012 did the Applicant continuously use and occupy the Sydney Property as her principal place of residence. During that latter period the Daily Calendar in MP1 evidences her occupation of the Sydney Property for some 129 days of a 6 month period. This does not assist her in relation to the clause 8 concession as she did not then use and occupy as a principal place of residence other land not owned by her (clause 8(1)(b)). The evidence is that she then continued to use and occupy the Sydney Property as her principal place of residence until the property was sold in November 2012. 191In order for the Applicant to obtain the benefit of the clause 8 concession it is necessary to evidence compliance with clause 8 (1) (b). This requires the Applicant to show that she used and occupied land that was not owned by her as her principal place of residence. Using either the Lucas Street Broome or Hunter Street Broome properties, neither of which were owned by, as her principal place of residence within 6 years after having left the Sydney Property may have been of assistance to her. However the Applicant must also show that she left the Sydney Property to move to Broome or left some other property which she owned and in which she resided as her principal place of residence. 192The evidence is that the Applicant moved from the Sydney Property to Darwin in about 1997, initially residing at the Marina Property and then at the CBC Property until she moved to Lucas Street Broome in 2007. In 2006 the Applicant resided at the Sydney Property for 48 nights and at the CBC Property for 149 nights. In 2007 the Applicant resided at the Sydney Property for 18 nights, the CBC Property for 64 nights and the Lucas Street property for 104 nights. The Applicant did not take up residence at the Hunter Street Broome property until November 2010. 193It seems to me that it is more likely that the Applicant moved her residence from the CBC Property to the Lucas Street property rather than moving from the Sydney Property. Accordingly I am not satisfied that the Applicant has complied with the requirements of clause 8(1)(b) so as to obtain the concession in clause 8 in relation to the Sydney Property. The Applicant's second alternative submission was that if her family was found to own more than one residence used and occupied by any of them as a principal place of residence she made a valid election that the Sydney Property be the principal place of residence for her family 194This submission relates to subclauses (2) - (4) of clause 12 of Sch 1A which is found in Part 4 of the schedule headed "Restrictions". A copy of a document headed "Election Under Clause 12 of Schedule 1A of the Land Tax Management Act 1956" signed by the Applicant and dated 6 December 2012 is at page 1363 of the s. 58 documents. The document states: "Pursuant to clause 12 of Schedule 1A of the Land Management Act 1956 (sic), I hereby elect that if the Chief Commissioner concludes that for any of the 2008 to 2012 Tax Years the members of my family and I own (whether jointly or separately) more than one residence used and occupied by any of the members of my family and I as a principal place of residence, the Chief Commissioner is to treat the property at New Beach Road, Darling point NSW 2027, as the principal place of residence of all members of my family and I." 195Clause 12 is set out at [7] above. Its application and the validity of an election was dealt with by the Court of Appeal in Chief Commissioner of State Revenue v Paspaley [2008] NSWCA 184 (Paspaley 2008). In that matter Basten JA, with whom Giles JA and Campbell JA agreed, said at [56] and [60]: "...the Chief Commissioner... contended that the question of an election only arises in the case of two or more members of a family owning separate residences and having different principal places of residence. An individual cannot have more than one principal place of residence (see definition in s 3(1) ...) and therefore cannot elect which of two is to be his or her principal place of residence for the purposes of land tax. The question of election arises because there can be only one exemption in respect of a family and different members of a family may have different principal places of residence." (my emphasis) "..The Chief Commissioner's construction of the Act is correct..." 196The undisputed evidence is that the Applicant's family consisted of herself and Mr Grbavac. At no time did Mr Grbavac own any real property. In order for clause 12(2) to apply there must be two or more residences owned, whether jointly or separately, by two or more members of a family, (Paspaley 2008). Accordingly clause 12 cannot assist the Applicant in these proceedings and I find that no valid election was made by the Applicant. The Applicant's third alternative submission - if the Applicant's family is found to own more than one residence used and occupied by any of them as a principal place of residence, the Sydney Property should be treated as the principal place of residence for the family as it has the highest land value for land tax purposes. 197This submission relates to subclause (5) of clause 12 of Sch 1A which provides: "If an election is not made, the Chief Commissioner is to treat the residence that has the highest land value for land tax purposes as the principal place of residence of all members of the family." 198Ms Ensor made detailed oral and written submissions concerning the meaning of the phrase "highest land value for land tax purposes" for which I am grateful. Mr Bennett conceded for the Respondent that the land value of the Sydney Property was higher than the land value of the CBC Property at all relevant times. 199Subclause (5) applies where there is no election in the circumstances outlined in subclauses (3) and (4). Subclauses (3) and (4) relate back to the election referred to in subclause (2) which may only be made "If members of a family own (whether jointly or separately) more than one residence used and occupied by any of them as a principal place of residence." Having regard to the decision in Paspaley 2008, subclause (5) will not assist the Applicant unless both the Applicant and Mr Grbavac, the only other member of her family for the purposes of the LTM Act, own, whether jointly or separately, more than one residence used and occupied by either of them as a principal place of residence. 200As Mr Grbavac has never owned a residence, subclause (5) cannot apply to assist the Applicant.

Conclusion 201The submissions that the Sydney Property was the Applicant's principal place of residence for the Relevant Period do not make it so without appropriate supporting evidence. Having regard to the evidence before me I am not satisfied on the balance of probability that the Sydney Property was the principal place of residence of the Applicant for any of the relevant tax years.

Decision 202The correct and preferable decision of this Tribunal is that the Commissioner's decision under review is affirmed.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 December 2014